US upholds ban on Tar Sands Oil

U.S. Congress upholds restrictions on high-carbon fuels

Last Updated: Thursday, September 25, 2008 | 10:18 PM ET

Mining trucks carry loads of oil-laden sand after being loaded by huge shovels at the Albian Sands oilsands project in Fort McMurray, Alta., in 2005.(Jeff McIntosh/Associated Press)Fuels derived from Alberta’s tarsands could find a tougher market in the United States after Congress decided Thursday to uphold legislation restricting imports of fuels from high-carbon sources.

The decision was celebrated by environmental organizations that have been campaigning against changes to Section 526 of the U.S. Energy Independence and Security Act of 2007.

Members of Congress have spent the past nine months contemplating whether to repeal or weaken Section 526, which deals with fuels from high-carbon sources such as tarsands oil, liquid coal and oil shale.

“Of course, we will remain vigilant against new attacks on Section 526, but this decision in the Defence Authorization Bill debate should carry great weight,” said Liz Barratt-Brown, a senior lawyer with the Natural Resources Defence Council, in a statement.

“The bottom line is Americans want their government to invest in new clean energy, not high-carbon fuels of the past.”

Under Section 526 of the act, U.S. federal government agencies are restricted from entering into contracts to purchase synthetic, alternative or non-conventional fuels with higher emissions than their conventional counterparts, unless the life cycle of their greenhouse gas emissions are the same as or less than conventional oil.

The provision has been described by its author, Representative Henry A. Waxman, as a way to ensure U.S. federal agencies are not spending taxpayer dollars on new fuel sources that will exacerbate global warming.

“The provision is also applicable to fuels derived from tarsands, which produce significantly higher greenhouse gas emissions than are produced by comparable fuel from conventional petroleum sources,” Waxman wrote in a March letter to the chairman of the U.S. Senate committee on energy and natural resources.

“The development and expanded use of these fuels could significantly exacerbate global warming, with highly dangerous effects. Thus, it is important to ensure that the federal government does not subsidize or otherwise support the expanded use of these fuels through government purchasing decisions.”

Some U.S. officials have said the regulations will not apply to oilsands production.

Greg Stringham, spokesman for the Canadian Association of Petroleum Producers, said it will be up to Congress to decide whether this law will apply to gas from the oilsands.

“The language is very unclear because they’ve used the words alternative fuel. So what we need is to have a clear definition on the law before it can be implemented.”

Stelmach vows to seek larger Alberta crude market

Alberta Premier Ed Stelmach has urged U.S. business leaders not to believe that oilsands production takes too much of a toll on the environment. He travelled in January to Washington, where he told an energy forum that attempts to slow oilsands development don’t make sense.

Stelmach has vowed to seek a larger market for Alberta crude, whether or not the U.S. government placed restrictions on the province’s oil.

“We will not only depend on the American market, we will expand markets,” Stelmach said in May in Edmonton. “And if that means building a pipeline to the coast and selling oil to another country, we will.”

Environmentalists have targeted Alberta’s oilsands industry because they say the process of refining bitumen creates three times as much greenhouse gas as conventional oil production methods.

Most of the oil in the tarsands is trapped in a mixture of sand, water and clay, making it difficult and expensive to extract.

A conference of U.S. mayors in July approved a resolution calling on its members to ban the use of energy from unconventional sources such as the tarsands because of the impact on the environment.

The mayors said importing oilsands fuel slows the transition in the United States to cleaner energy sources.